The After-Effects of Tax Debt Relief Scams

Posted on January 24, 2022

The After-Effects of Tax Debt Relief Scams

American Tax Relief, Tax Masters, and Roni Deutch were big names in the tax debt relief industry until their scams were discovered. The result of their tax scams is widespread distrust among taxpayers about the honesty of tax resolution companies. As it happens in such cases, the good also suffer with the bad. Tax professionals and tax resolution companies that perform honest work have also been targeted and doubted.

Tax Debt Relief Services & the FTC Rule

Tax fraud by tax companies is indeed a problem in the country. In October, 2010, the Federal Trade Commission (FTC) issued a new rule to protect American taxpayers from fraudulent tax companies that charge bloated upfront fees.

The FTC enforcement statement on new debt relief rule says “that while most companies that sell debt relief services over the telephone are now prohibited from charging fees before settling or reducing a consumer’s credit card or other unsecured debt, it will defer enforcement of the new rule for tax debt relief services. The enforcement policy states, however, that tax debt relief services must comply with the FTC’s Telemarketing Sales Rule, except for the debt relief amendments, during the enforcement deferral period. It also reminds providers that they must comply with the FTC Act, which prohibits unfair and deceptive practices.”

Tax Relief Industry under the Scanner

After many large, well-known companies were revealed to be frauds, taxpayers have been kept informed about how to spot scam by fraud tax resolution firms. Using bloated upfront fees, false advertising, and billing inconsistencies are some of the common scams fraudulent tax companies use. Now that taxpayers are more aware of these methods, they have been able to better protect themselves.

Ratings of the Better Business Bureau (BBB) and online access to the consumer complaints reported to the FTC have made it easier for taxpayers to judge tax debt resolution companies better. To assist taxpayers in their research, we have rated and reviewed top tax companies.

Honest Tax Relief Companies

With many organizations such as the BBB and the FTC encouraging taxpayers to complain about fraudulent tax resolution companies, it has become easier for victims of fraud tax businesses to make complaints online. With increased vigilance by law enforcement authorities and consumer protection agencies, it has become difficult for scam tax companies to survive.

One of the most noticeable characteristics of legitimate tax companies is their openness. They share their company history, the identity of their staff, their method of operations and fee structure, not only with their clients, but also online, offline, and in media. Only honest companies practice transparency.